SARASWATI DEVI (D) BY LR. versus DELHI DEVT. AUTHORITY & ORS.

Citation: [2013] 4 S.C.R. 922 · Decided: 29-01-2013 · Supreme Court of India · Bench: RAJENDRA MAL LODHA · Disposal: Dismissed

Judgment (excerpt)

A 
B 
[2013] 4 S.C.R. 922 
SARASWATI DEVI (D) BY LR. 
v. 
DELHI DEVT. AUTHORITY & ORS. 
(Civil Appeal No. 4373 of 2009) 
JANUARY 29, 2013 
[R.M. LODHA AND ANIL R. DAVE, JJ.] 
Land Acquisition - Acquisition of land owned by 
Government - Whether pennissible - Held: If the Government 
C has complete ownership, such land cannot be acquired, but 
if some private rights have been created in such land or the 
land has some encumbrances, such land can be acquired -
In the instant case, the subject land though owned by 
Government, encumbrance was created by giving possessory 
D rights to the private party, hence could have been acquired 
under Land Acquisition Act - Land Acquisition Act, 1947 - s.4 
rlw. s, 17(1)(iv). 
Words and Phrases - 'Encumbrance' - Meaning of. 
E 
The land in question was an evacuee property, 
acquired by Central Government under s.12 of Displaced 
Persons (Compensation and Rehabilitation) Act, 1954. 
The property was sold in public auction and the 
appellant's husband was the highest bidder therefore. In 
F 
the year 1960, appellant's husband was given provisional 
possession of the land. In the year 1980, title of the land 
was transferred to the auction purchaser. In the meantime 
i.e. in the year 1962, the land in question was acquired 
by the respondent Authority. After 30 years of acquisition, 
G the appellants filed a writ petition challenging the 
acquisition proceedings. Single Judge of High Court 
allowed the petition. In Writ Appeal, Division Bench of 
High Court, set aside the judgment of Single Judge. 
Hence the present appeal. 
H 
922 
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 
923 
AUTHORITY & ORS. 
Dismissing the appeal, the Court. 
HELD: 1. In respect of the property forming part of 
the compensation pool put to public auction under Rule 
A 
90 of Displaced 
Persons 
(Compensation and 
Rehabilitation) Rules, 1955, a binding contract for the sale B 
of the property to the auction-purchaser comes into 
existence on approval of the highest bid by the 
Competent Authority. Once the payment of the full 
purchase price is made, title in the property would pass 
to an auction-purchaser. In other words, on the payment 
of the full purchase price, the ownership in the property C 
sold in public auction would stand transferred but the 
transfer formally becomes complete on issuance of the 
certificate of sale. If in the sale certificate, any particular 
date is mentioned as provided in the proforma appended 
to Rule 90, such date mentioned in the sale certificate D 
may be presumed to be the date on which the purchase 
has become effective but crucial date for transfer of 
ownership in the property in favour of auction-purchaser 
is the date when full purchase price has been paid by the 
auction-purchaser. But this legal position does not help E 
the appellant because of completion of acquisition 
proceedings in 1962 i.e. much before the payment of full 
purchase price by the appellant. In the absence of any 
title in favour of the appellant or her husband on the date 
of acquisition, the challenge to such acquisition could 
F 
not have been allowed by the Single Judge. The Division 
Bench rightly set aside the erroneous order of the Single 
Judge. [Paras 32 and 47] [947-G-H; 948-A-C; 955-B-D] 
Bishan Paul vs. Mothu Ram AIR 1965 SC 1994; Mis. 
Bombay Salt and Chemical Industries vs. L.J. Johnson and G 
· Ors. AIR 1958 SC 289; Jaimal Singh, slo Jawahar Singh and 
Anr. vs. Smt. Gini Devi AIR (1964) Punjab 99 - referred to. 
2. The word "encumbrance", according to its 
ordinary significance, means any right existing in another H 
924 
SUPREME COURT REPORTS 
(2013] 4 S.C.R. 
A to use the land or whereby the use by the owner is 
restricted. The word "encumbrance" imports within itself 
every right or interest in the land, which may subsist in 
a person other than the owner; it is anything which places 
the burden of a legal liability upon property. The word 
B "encumbrance" in law has to be understood in the 
context of the provision under consideration but 
ordinarily its ambit and scope is wide. Seen thus, a 
binding contract entered into between an auction-
purchaser and the Government on approval of the 
c highest bid relating to sale of property, which is part of 
compensation pool under Section 14 of Displaced 
Persons (Compensation and Rehabilitation) Act, 1954 
followed by provisional possession to the auction-
purchaser, should come within the purview of the word 
0 
"encumbrance". [Para 40]

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